Carbon Offsetting: A Path to Net Zero or a Greenwashing Risk

The drive toward sustainability has never been more urgent.

Around the globe, companies face mounting expectations to cut greenhouse gas emissions to net zero. The push comes from increasingly stringent regulations and shifting consumer priorities favouring environmentally responsible practices.

Yet, achieving net zero is far from simple. For most organisations, fully eliminating emissions—largely from carbon dioxide (CO₂) and methane  — is impractical.

Some emissions are intrinsic to operations and cannot be reduced entirely. So, how can businesses realistically meet these ambitious goals? One approach gaining traction is carbon offsetting.

This method allows companies to purchase carbon credits to account for their residual emissions, effectively "balancing the books."

Carbon credits promise to neutralise emissions businesses cannot eliminate directly. But while the idea seems straightforward, carbon offsetting faces scrutiny, with critics raising concerns over greenwashing— a practice where businesses exaggerate their environmental credentials.

Carbon offsetting: Balancing emissions and restoring nature

Carbon credits are units representing the removal of one tonne of CO₂ equivalent (tCO₂e) from the atmosphere. These credits are generated through projects that sequester carbon, such as planting trees, restoring peatlands or enhancing soil carbon levels.

Organisations purchase these credits to offset emissions they can't cut directly.

James Shepherd, Partner for Rural Consultancy at Knight Frank, explains the scale of one carbon credit: "In volume terms, a single credit equates to around 560 cubic metres of CO₂ and these credits can provide substantial income for landowners engaging in sustainable practices."

In the UK, rural estates and farms are embracing this opportunity.

Government-supported schemes like the Woodland Carbon Code and Peatland Code incentivise projects that both sequester carbon and enhance biodiversity.

For instance, the Far Ralia project in Scotland's Cairngorms national park is a prime example. This 3,668-acre initiative aims to generate 346,000 carbon credits while promoting large-scale biodiversity recovery.

Knight Frank, the UK's largest real estate agency, is marketing the project for £12.1m.

Claire Whitfield, a Partner at Knight Frank, calls the scheme a "market first."

She explains: "Far Ralia offers a unique opportunity to invest in a fully funded afforestation and biodiversity enhancement project, sequestering an estimated 346,000 tonnes of carbon."

Despite these promising ventures, the carbon credit market has faced criticism for its lack of stringent oversight. Some argue that offsetting schemes allow polluters to avoid meaningful reductions in their emissions.

Addressing greenwashing and strengthening carbon markets

Concerns over greenwashing highlight weaknesses on both sides of the offsetting equation.

On the supply side, questions arise about the validity of some carbon credits, particularly those linked to projects in developing countries. Investigations reveal that certain credits overestimate carbon sequestration or fail to deliver expected outcomes.

Buyers, meanwhile, risk criticism for relying on credits instead of making substantial changes to their operations. Critics argue that offsetting should complement, not replace, robust emission-reduction strategies.

Still, advocates of offsetting insist on its potential when used correctly.

Rich Stockdale, CEO of Oxygen Conservation, champions transparency in the process. "We only work with businesses genuinely committed to reducing their emissions.

"Our credits are fully transparent, down to the specific trees capturing carbon. Purchasers can even visit the projects themselves."

Oxygen Conservation exemplifies high-integrity offsetting, combining carbon sequestration with biodiversity conservation. The organisation channels proceeds from credits into expansive ecological projects. 

To realise its full potential, the carbon market must adhere to rigorous standards and accountability. The UK’s regulated woodland and peatland schemes set an encouraging precedent, offering transparent frameworks for verifiable projects.

Expanding these initiatives to include soil carbon could be transformative for sustainable farming, helping farmers monetise regenerative practices that align with environmental goals.

A path forward for carbon offsetting

Carbon offsetting, despite its critics, remains a valuable tool in the broader sustainability effort — when applied with integrity.

It enables companies to address unavoidable emissions while supporting projects that benefit the planet.

Rich acknowledges the challenges but maintains a firm belief in offsetting’s promise: "If you just buy a carbon credit from somewhere in the world from an online portal, what are you actually buying? You’re buying the right to pollute with an offset, whereas with our carbon credits you are buying an experience."

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